Rumors and speculations keep the currency markets busy
Key Notes:
- Japan Current Account 1.27tn vs. 1.45tn
- Japan final GDP q/q 1% vs. 0.7%; final GDP price index y/y 3.4% vs. 3.4%
- Japan Bank lending y/y 2.6% vs. 2.6% previously
- China trade balance 59.5bn vs. 44.9bn
- Japan economy watchers sentiment 53.3 vs. 54.2
- German industrial production m/m 0.9% vs. 0.6%
- German trade balance 22.3bn vs. 18.1bn
- Eurozone Sentix investor confidence 17.1 vs. 18.9
- Canada housing starts 202k vs. 187k
- Canada building permits 11.6% vs. 3.4%
Later:
- US Labor market conditions index
The currency markets started the week on a busy note with the early Asian trading session seeing some economic releases from Japan. Japan’s final GDP numbers showed an upward revision to 1%, from 0.6% previously while most of the other economic data managed to match expectations. The Yen was however unaffected by the data as the currency continued to stay weak across the board. with the USDJPY caught between rumors that US President Obama had voiced concerns about the strength of the US Dollar, which saw the Greenback weaken early in the day but managed to hold ground as US officials dismissed the rumors.
The Aussie and the Kiwi dollar both continued to stay subdued, not just against the Greenback but also a host of other currencies as well. AUDUSD was seen trading near 0.764 and was trading sideways for the most part. The NZDUSD managed to find support near daily lows of 0.704 and managed to bounce higher to trade near 0.7087 at the time of writing.
Turkish Parliamentary Elections
The Turkish Lira dropped sharply against the Euro and the Greenback, losing -4.5% and -4.4% respectively as the Turkish election results saw the ruling AK party lose its status as a single majority party. The election results saw the Kurdish party gain considerable share leading to what is being termed as a snub from the Turkish electorate. The weeks ahead will see tough negotiations in order to form a coalition party, failing which fresh elections could be called for.
The election outcome led to the sharp decline with the markets ignoring the economic data which included a better than expected pickup in industrial production, which grew at 3.8% y/y in April.
The European trading session saw a subdued Euro but one which managed to reverse its initial losses. The Euro was however trading close to the 1.11 price level for the most part, while the GBPUSD was trading near the daily pivot level of 1.5273. There were no major economic releases from the European trading session with the exception of the German industrial production which rose above estimates to 0.9%. Eurozone Sentix investor confidence however fell short of expectations printing 17.1, below consensus of 18.9.
The US trading session is relatively quiet with only the Labor market conditions index due for release later in the day. Canada’s economic data released showed a robust print in the housing starts, which rose 202k beating estimates while building permits posted a strong 11.6% growth, beating estimates by a strong margin.
The Canadian dollar continued to trade strong against the Greenback since Friday’s surprisingly strong jobs print. USDCAD declined from session highs of 1.2467 to trade near 1.241 region at the time of writing.
